New Delhi, June 26: India's Union Finance Minister Nirmala Sitharaman is all prepared with her team to give the final touches to the Union Budget 2019, which she will be presenting in the ongoing Monsoon Session of Parliament on July 5, 2019. As India's rural economy is stressed, unemployment rate plunging and fiscal deficit on the brink, expectations from Sitharaman and team are peaking each hour.
Budget in India has always been a daunting task of filling one hole by digging another to keep everyone happy. However, with the prevailing scenario, where the debate over GDP growth, fiscal deficit, declining export, agrarian crisis, high taxes, distress in academics, among others are escalating, there would be challenges that Sitharaman and her team need to cope with. Budget 2019-20: FM Nirmala Sitharaman Holds Pre-Budget Meeting With Finance Ministers of All States
Considering that Sitharaman has kept herself away from the press ever since she took office, it looks she is quite involved in the process of drafting the Union Budget 2019. Being an academic scholar in Economics from the prestigious Jawaharlal Nehru University and having hands-on experience in corporate trade affairs, her supervision in drafting the Union Budget will be something to look forward to.
However, people are expecting a lot from her and here's some expectation we have compiled for the Union Finance Ministry, which is being grilled now with additive pressure to bring back the GDP rate above 8 percent.
Income Tax, Corporate Tax and Minimum Alternative Tax:
This is one field which every working Indian and corporate look forward to whenever Union Budget is read out in Parliament. In the Interim Budget 2019, Union Minister Piyush Goyal had relaxed the Income Tax from Rs 2.5 lakh per annum (PA) to Rs 5 lakh PA. So not much is expected at this juncture for IT reforms. GST Council Meet: Last Date of Filing Annual Returns Extended to August 30
In the corporate tax segment, corporate firms are looking at some tax relief in the form of a cut in the tax rate to 25 percent from the current 30 percent at all present form of companies. In the case of Minimum Alternative Tax (MAT) too - levied on businesses as per Section 115JB - the industry is expecting a cut from present 18.5 percent of book profits to 10 percent. It is to be known that only companies with a turnover up to Rs 250 crore come under 25 percent corporate tax slab.
Goods and Services Tax (GST)
Apart from the Income Tax, the major concern for the industry and shopkeepers in the country now is GST rates. Sitharaman had been chairing the GST meeting for the last two weeks, mulling cutting down of various products under the GST slab. Though industry wants the Union Minister to scrap 28 percent GST on exclusive products - along with the simplifaction of filing it - products under the ambit of exclusive GST rates might take a hit this time. Nirmala Sitharaman And Team All Set to Revamp GST on June 21; Mull Curb on Tax Evasion
People are certain that this time too, the Railway Budget will be presented along with the Union Budget 2019 as Piyush Goyal did. People will be expecting new trains this monsoon, but what they won't expect is a hike in fares. Commuters are looking at how the minister takes care of hassle-free tatkal bookings and seat availability in Indian Railways, while not disturbing commuters' comfort.
Better services are what Indians looking at, but safety is also a concern, especially for women passengers. In the Interim Budget - presented in February - Goyal had announced that Capex (capital expenditure) for FY20 was pegged at a record Rs 1.6 lakh crore and not even a single unmanned railway crossing on broad gauge lines lies anywhere in the country.
According to the medium term expenditure projection statement - presented by the Ministry of Finance during Interim Budget - the Union government had already allocated Rs 52,800 crore (budget estimates) in the health sector of the country. In the current fiscal year 2019-20, the government is mulling allocating Rs 59,039 crore.
It is expected that after the recent health epidemic like Acute Encephalitis Syndrome (AES) in Bihar, Sitharaman might look into the aspect of increasing the Budget allocation for the National Rural Health Mission. Along with this, PM Modi's esteemed scheme - Ayushman Bharat Scheme - will definitely get a boost. Nirmala Sitharaman-Led Ministry of Corporate Affairs, SEBI Sign MoU on Data Surveillance to Curb White Collar Corporate Frauds
Surprisingly, India spends less than two percent of its GDP on healthcare - one of the lowest investors globally - which stands at Rs 3 per day as a daily expense. The World Health Organisation places India’s healthcare expenditure behind Iraq and Venezuela.
Agriculture and Small Trade:
In order to tackle the rising anger against the government with respect to apathy towards farmers, the Union Finance team is mulling implementing loan waivers and strengthening water management system in the country. In the Interim Budget, Rs 6,000/year was announced under Pradhan Mantri Kisan Samman Nidhi as income support for small and marginal farmers, while Kamdhenu scheme was launched for animal husbandry sector.
Similarly, schemes for small traders like Pradhan Mantri Shram Yogi Maandhan Yojana was announced during the Interim Budget, under which unorganised sector workers with income up to Rs 15,000/per month would get a Rs 3,000 as a pension - with a contribution of just Rs 100/pm. The ministry had also raised the gratuity limit to Rs 30 lakh. Narendra Modi Govt Mulls Major Rejig in Labour Laws; Plans to Decrease Them From 44 to 4
Keeping the aspect of small labourers in mind, Goyal had announced a Budget allocation of Rs 60,000 crore for MNREGA and Rs 19,000 crore for Gram Sadak Yojana for the construction of rural roads. These sectors are expected to get more funds this time.
Education has been a neglected field in the Union Budgets. In the last interim Budget too, nothing special was done. Apart from increasing 25 percent additional seats in educational institutions to meet the 10 percent reservation for the poor, funds were barely raised.
However, the Union Ministry did consider allocating Rs 38,572 crore - a 20 percent raise than previous FY 18-19 - in National Education Mission. Also, under the Integrated Child Development Scheme, the allocation was increased by over 18 percent to Rs 27,584 crore, which was still less than some developing countries. Nirmala Sitharaman, Finance Minister, to Chair GST Council Meeting on June 20; Likely to Reduce Items Under 28% Slab
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Last but not least is the Defence sector, which has been the most important area for the PM Modi-led BJP government at Centre. In the last interim Budget, the Union government had increased the Defence budget to over Rs 3 lakh crore and assured that it might infuse additional funds if need be. PM Narendra Modi's Second Term Will 'Bring Big-Bang Economic Reforms', Says Niti Aayog Official
Along with this, the Union government had disbursed Rs 35,000 crore for One Rank One Pension (OROP) scheme in the last few years. Considering the direction and agenda of the Modi 2.0, this sector is bound to get a boost in the Union Budget this time, as Sitharaman is placed as the Finance Minister, Amit Shah as Home Minister and Rajnath Singh as Defence Minister.